Toxic Workplace Report, $2M Deficit Dominate Willits City Council Meeting
Council reluctantly passes a budget for the current fiscal year
The Willits City Council unanimously approved a formal response to a Mendocino County Civil Grand Jury investigation and adopted a budget for fiscal 2025-26 at its Sept. 24 meeting.
The grand jury report found that Willits had a toxic workplace culture that drove away highly qualified employees. The council accepted the finding but noted it did not know who had left or why.
“In essence we did not interview said employees because it was confidential,” Councilmember Gerry Gonzalez said. “In places we had to agree the grand jury found what they found because we didn’t interview these employees ourselves.”
The report also said employees lacked an effective way to bring complaints to management, in part because the city has no human resources director. Employees who spoke confidentially to Mendo Local said a senior manager who might have served as an alternative was also accused of toxic behavior.
City employee Nici Caldwell asked where staff can turn today. “Where can the employees now go to talk to who and where do we go with issues … so all the stuff that happened over the last four years is not happening again?” she said.
Mayor Tom Allman acknowledged the gap had not been filled. “Right now the city does not have a personnel director,” he said. “A person working in the personnel department or the city manager would be the correct person to talk to, unless one of those two people is the issue. And if that’s the issue, you talk to the other.” He also volunteered to help find the appropriate person. “If any city employee wants to discuss a situation with me, I will direct them to someone they can talk to.”
Allman added that senior managers referenced in the report had already left the city. “It’s rectifying a situation which appears to be rectified,” he said. “It’s a moot subject.”
Later, the council voted 4-1 to pass the budget, with Councilmember Bruce Burton opposed. To balance the budget, the $7 million general fund will receive $2.1 million in Measure K sales tax revenue and draw $73,000 from reserves. The general fund’s projected balance at the end of the year will be under $400,000.
Other city funds showed strain. The airport fund is projected to end the fiscal year $430,000 in the red, and the water enterprise fund faces a shortfall with $3.3 million in revenue against $3.5 million in expenses.
Financial consultant Andy Heath warned of an ongoing structural deficit in the general fund. “The city’s general fund has a $2.4 million annual issue which is just not sustainable,” he said. Salaries and benefits for the city’s 63 employees make up 80% of general fund costs, he added, while most cities of Willits’ size spend closer to 60% to 65%.
Gonzalez said he voted for the budget reluctantly, with the understanding that the city manager will propose cost reductions and a reorganization plan. “We can’t continue this way,” he said.
Former Mayor Madge Strong criticized past financial reporting. “If I had known the city was basically driving down a railroad track that was going to go over the cliff, I would have been very alarmed,” she said.
Burton objected to balancing the budget with Measure K funds. “I don’t like approving a $2 million deficit budget,” he said. “The decisions aren’t going to get easier.” Burton blamed staff for not recommending cuts.
Councilmember Matthew Alaniz defended staff, saying the city had made progress. “This is the first budget I’ve seen that we are in the black with accurate numbers, and I think that counts for something,” he said. He added that fixing the city’s financial issues will take time. “It’s not going to get done in one year,” he said.
In other action, the council voted 4-0 to create new mixed-use zoning districts, revise off-street parking standards and allow franchise businesses to operate without a use permit. Burton abstained because he owns parcels affected by the changes.
Bravo for covering the theater of the odd in Willits. Now I'll have to read the next issue of Willits Weekly and see what they make of it. Seems like the city manager could do exit interviews? While the specifics in the Grand Jury report seem to be moot, someone is asking who to talk to and there is no personnel director. How many employees do they have? Also wondering about no use permits for franchises? Does everybody else have to have one? The budget likely depends on sales taxes as I would think the TOT would be minimal in Willits?